Palm fungi are a taxonomically diverse group. Recent collections of fungi from palms in northern Thailand resulted in the discovery of a new species of Neodeightonia, herein described as N. palmicola. This new species is distinct in having hyaline, aseptate ascospores surrounded by a remarkable sheath. This study compares this new species with related taxa of Botryosphaeria and Neodeightonia using morphological and molecular characteristics. Sequence data show our species is more closely related to Neodeightonia subglobosa (the type species of the genus) than to Botryosphaeria species. Morphological and molecular features of the new species are described.